Both airlines blame each other for the capacity war causing losses, but Mr Borghetti said Qantas had flooded the market with 7.1 million new seats in three years compared to Virgin's 2.8 million.

Mr Borghetti is urging the federal government not to grant Qantas's request to guarantee its debt but said the Qantas Sale Act should be changed to allow foreign investors to take greater stakes in the national carrier.

He rejected the suggestion Virgin was government-financed through its state-owned largest shareholders Singapore Airlines, Etihad Airways and Air New Zealand, pointing out that did not include debt guarantees.

Virgin's underlying pre-tax loss was $49.7 million, with the $27 million cost of the carbon tax contributing to the higher net loss.

Mr Borghetti said he was confident Virgin was on the right path back to profitability.

While Qantas claims a 65 per cent share of the domestic market, he said Virgin had increased its proportion of domestic revenue from the lucrative corporate and government market to the mid-20s per cent range.

IG market strategist Evan Lucas said Virgin had outperformed Qantas growing revenue, but the fact that it had not provided financial guidance for the rest of the year and a 10.6 per cent cost rise would turn investors against it.

"If you ask what type of business an airline is, on face value it looks horrible but they have to be around as there's a necessity and need for them," he told AAP.

"Aviation is going to be an interesting story over the next 18 months ... I think by then Qantas will have stripped their international division to 1-2 flights in Brisbane and Perth, just one in Adelaide."

Virgin shares fell by a quarter of one cent to 34.75 cents by 1545 AEDT while Qantas recovered from Thursday's 9.0 per cent rout to be up one cent to $1.165.